Closure Of Botswana Copper Mines Drags Down Country’s Mining Output

The Indices of Mining Production (IMP) showed a decline in the first quarter of 2017 as compared to the same period in 2016, new data by Statistics Botswana has revealed. The statistics body said on its Indices of the physical volume of mining production, Stats Brief for first quarter of 2017 that the IMP stood at 77.1 in the first quarter of 2017 showing a year-on-year decline of 14.4% from 90.1 during 2016 first quarter. The quarter-on-quarter analysis gives a decline of 6.4% from 82.4 during 2016 fourth quarter.

According to Stats Botswana, the closure of three copper-nickel mines as well as unstable world commodity prices for all minerals is the major factors that contributed negatively to the growth of mining production during the first quarter of 2017.

“The main contributors to the decline in the year-on-year percentage change in the physical volume of mining production during the first quarter of 2017 were copper-nickel-cobalt matte contributing negative 11.3 percentage points followed by diamonds and Soda Ash with 2.4 percentage points and 0.5 of a percentage point respectively.”

It added that even though coal production had a positive year-on-year percentage change, this was not able to make a positive contribution (% points) to the overall year-on-year percentage change in the volume of mining production due to its insignificant weight in the index.

Stats Botswana revealed that diamond production recorded a decrease of 2.7% during the first quarter of 2017 as compared to the first quarter of 2016. “The decline was largely due to the mining of lower grades diamonds in Jwaneng mine as well as maintaining business strategy to align production to trading conditions,” it said.

“The quarter-on-quarter analysis shows that diamond production decreased by 5.0% during the first quarter of 2017 when compared with production during the last quarter of 2016.”

Gold production declined by 26.0% in the first quarter of 2017 when compared to the same quarter of 2016. This decline was as a result of unstable commodity prices. The quarter-on-quarter production comparison shows a decrease of 37.2% for production during the quarter under review when compared to 2016 fourth quarter production.

A decrease of 39.0% in Soda Ash production was registered during the first quarter of 2017 when compared to the same quarter of 2016. The quarter-on-quarter comparisons reflect a decrease of 52.4% during the period under review as compared to last quarter of 2016.

“Salt production recorded a decrease of 31.7% in the first quarter of 2017 when compared to the first quarter of 2016. The quarter-on-quarter comparison shows a decrease of 52.1% in production during the first quarter of 2017 as compared to production during the last quarter of 2016.”

The decline for both soda ash and salt is attributed to low commodity demand as well as the unstable commodity prices in the international markets.

On the other hand, coal is the only commodity that recorded positive growth in production, increasing by 14.7% in the first quarter of 2017 as compared to the corresponding quarter of 2016. However, the comparison of the first quarter of 2017 and fourth quarter of 2016 shows a decline of 9.6%.

“It is important to note that though Morupule power plant demand for coal resulted in the year-on-year increased demand for the commodity, the closure of the BCL mine in the last quarter of 2016 (one of the local markets for the commodity) negatively affected the coal production leading to low coal production in the first quarter of 2017.”

Copper-Nickel-Cobalt Matte, Silver and Copper in Concentrates recorded zero production during the period under review. The instability and uncertainty of commodity prices had negatively affected the mines, leading to the provisional liquidation of the concerned companies.

This statistical release presents quarterly Indices of Mining Production for the period 2003 to the first quarter of 2017.